New York, NY ­ August 26, 2003 - Applied NanoMaterials, Inc. (www.apnano.com), a provider of nanotechnology-based products, today
announced that it will manufacture and sell a new and superior kind of
inorganic nanotubes for highly sophisticated products such as advanced
generation high resolution flat panel displays and atomic force microscopes
(AFMs). Inorganic nanotubes are considered to be the ideal material for
tomorrow’s nano electronic devices. In many cases they can be used to
replace silicon and so have many additional potential applications including semiconductor devices, sensors, biosensors, and nano-motors.
“The unique properties of inorganic nanotubes open new horizons for
applications in many areas, which cannot be realized by common carbon
nanotubes,” said Dr. Menachem Genut, President and CEO of Applied
NanoMaterials. “We have proprietary means for modifying their electrical
parameters from conductor to semiconductor and isolator states, which is ideal for numerous advanced electronic applications.”

The inorganic nanotubes can be used as components in the huge developing
market of flat panel displays. Current technologies have significant
limitations in picture quality and cost. Applied NanoMaterials has developed a simple and inexpensive method to produce inorganic nanotubes that have better electrical properties than other new materials like carbon nanotubes.

Applied Nanomaterials’ nanotubes can also serve as tips for atomic force
microscopes (AFMs). AFM instruments are used for studying materials at the
atomic level. “The advantageously high aspect ratio, chemical inertness and
high strength of our inorganic nanotubes enable them to accurately probe nano-scale structures such as high-density silicon chips,” said Dr. Niles Fleischer, Applied NanoMaterials’ VP of Business Development.

“Our inorganic nanotubes address very fast growing markets that may reach
several billion dollars by the end of this decade. It will open new
opportunities for Applied Nanomaterials, with the potential for generating considerable revenues,” said Aharon Feuerstein, Applied NanoMaterials’ Chairman and CFO.

Applied NanoMaterials commercializes a revolutionary scientific discovery:
nanospheres and nanotubes of inorganic compounds that were discovered at the
Weizmann Institute of Science, Israel. Dr. Menachem Genut, President and CEO
of Applied NanoMaterials, was a co-discoverer of these novel inorganic
nanostructures as a member of the Weizmann Institute’s Nanomaterials
Synthesis Group headed by Professor Reshef Tenne.

Applied NanoMaterials developed an innovative chemical reaction method that will allow a cost effective production of the inorganic nanotubes, at a lower cost than today’s production of carbon nanotubes.

Applied NanoMaterials has recently launched its first product, NanoLub ­ the world's first nanotechnology-based solid lubricant. The company has started several Beta-site tests of NanoLub and has established a primary production facility. Within two years the company intends to operate a semi-commercial reactor, producing about 100 kg a day of NanoLub. A commercial one-ton per day reactor will be operational in 2006.

About Applied NanoMaterials
Applied NanoMaterials, a private company, was incorporated in the US in
2002. The company was granted an exclusive license by Yeda Research and
Development Co. Ltd., the commercial arm of the Weizmann Institute of
Science, Israel, to manufacture, commercialize and sell the new
nanomaterials discovered at the Institute. The shareholders of Applied
NanoMaterials are Newton Technology VC Fund, Yeda Research and Development
Co. LTD. (the commercial arm of the Weizmann Institute of Science), AYYT
Ltd. (the commercial arm of Holon Academic Institute of Technology, Israel) and private investors. The company is headquartered in New York, USA, with an Israeli subsidiary - Nanomaterials Ltd. - located in the high tech science park adjacent to the Weizmann Institute campus in Rehovot, Israel.

For more information, please visit the Company's website at www.apnano.com